Opinion: The Top Three Income Inequality Fallacies

American Enterprise Institute Visiting Scholar Edward Conard debunks common myths in the debate on wealth in America. Photo: Getty Images

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... I ... the ... the administration is ... the scene of income inequality in the run-up to the November midterm elections ... but sometimes the White House and Democrats played ... fast and loose with the facts ... it debunks read of the biggest fallacy is ... is American Enterprise Institute visiting scholar and an art ... the author of unintended consequences so and ... I'll what's put up that the very first fallacy up on the screen and I quote ... the six sets of the one percent has come at the expense of the middle class why is this true loving the left isn't very good job of inflating the forces are at work that are driving the incomes of different groups ... so if you look at the top ... the Indian information technology the internet and access to global markets have really opened up an enormous number of investment opportunities ... there's a shortage of properly trained talent that drives up the wages ... and the fact that Europe and Japan have been able to compete in this area just makes the shortage that much more acute ... if you look in the other end of the spectrum coming out of the nineteen fifties and sixties there was a dearth of birth in the great depression ... that led to a shortage of labor and you have ... people moving off the farms in the cities which are much more productive than in manufacturing jobs that were very productive we saturated the population ... was educations at Provo productivity ... I have no optimal access to ... low-cost foreign labor at the time ... a lot of that he was all changed today would today we have an enormous surplus of labor ... we have a ... baby Boomers entering the workforce we women increasing their participation with an enormous migration of United States the one enormous trade deficit ... with with a huge surplus of labor ... of competing for middle-class and ... working class jobs ... and that really has held down ... of middle-class wage is ... completely independent of what's happening at the ... top end of the apple of the way that's a very complicated near new wants picture of a pull up the second ... a fallacy and I quoted that ... the success of the one percent only benefits the one percent and ... I'm there I think it at about the argument is really good you lived there the has no spillover effect of the middle class but ... there are two ways in which it to ... you when you look at today's economy which would be pulled down to the world wage because there's much more interconnectedness with the world ... I think ... the only thing to drive the wage up its local demand ... and and where is the growth the local demand coming from its coming from innovation which is being driven by the success of our ... of our I one percent ... and that has put enormous it up the pressure back to drive the wages of away from the other of the world which would you look there ... that force can take to affect the key to drive up employment what can drive of wages will we because of this migration and increase and one we had a huge increase in employment for in quickly on to the thirty minute talk about this next in in the full Senate appears that are defined ... in the widening this commission income as reduced ... upward mobility yet he lived in the ... the chatty and Sen's of which is the last large ... analysis of social mobility circumference is only twelve of them on the left I might add ... I have really come to the conclusion that mobility has not changed at all relative mobility subpoena twentieth percentile its probability ... you get the sixtieth percentile but the effect of that has been the increase absolute mobility ... if you look from their study ... at the probability of state making a hundred thousand dollars ... everybody across all points in the income distribution their probability has gone up ... for every for every level of wages so absolute mobility has risen ... relative had stayed the same if you ... compare us to Europe what you find is that ... we have ... mobility that identical to say Denmark except for the lowest twenty percent when you look of the lowest twenty percent you find ... a lower test scores higher dropout rates ... many more fatherless children much higher crime rates in so you really have to ask yourself is the economics which is causing those problems which are getting in the way of mobility or other other sociological issues which are having effect there but I think it's difficult to make the leap to ... the pop economics is what's driving our problems ok AEI visiting scholar and can art ...